BlueScope must keep producing steel in Australia if it wants to get a share of the $300 million steel industry assistance package announced with the carbon tax.Climate Change Minister Greg Combet told the Mercury steelmakers BlueScope and OneSteel would need to meet a threshold of 500,000 tonnes of steel production to qualify for assistance.BlueScope's $180 million share is expected to cover its carbon tax bill for the first four years.Mr Combet said some details of the Steel Transformation Plan (STP), which was developed late in the carbon tax negotiations, were still being decided but the Government would not dictate how the money was to be spent."They'll be able to access it for several key purposes," he said."One of them is production-related, so that can certainly assist with their carbon cost."Once the production threshold has been met, there will be three criteria that trigger the funding: spending on production, innovation or capital upgrades. There is not an obligation to reduce carbon emissions.The industry will also have 94.5 per cent of its carbon costs covered via free permits."Essentially it takes the carbon price issue off the table over the next four, five years in particular,’’ Mr Combet said. ‘‘But they can access it for other things that will encourage them to upgrade their facilities.‘‘It leaves some discretion in their hands about how they want to utilise it.’’If BlueScope reduces production levels in a bid to cut costs it will not lose funding as long as production remains above 500,000 tonnes. Last year, it made almost fivemillion tonnes of steel at Port Kembla.Legislation is expected to be introduced in September for the steel plan, which was developed by the Government and industry outside the Multi-Party Climate Change Committee.Support from the Greens for the legislation is not assured, with the party saying it needs to see the proposal before it decides.Greens deputy leader Christine Milne said the party did not back the STP in the committee because steel was not the only industry struggling with the effects of the high Australian dollar.‘‘Towards the end of the negotiations, the Government indicated they wanted to create a steel package, of support for the industry, which was unrelated to the carbon price but which acknowledged the difficulties of the industry in the face of changed economic circumstances,’’ she said.‘‘The Greens’ position has always been that we would support assistance for the level of trade exposure of any industry. We were very aware of the steel industry saying that they would have difficulty meeting a carbon price.‘‘The high Australian dollar and the input costs are also impacting on agriculture, are also impacting on tourism, also impacting on the education industry.‘‘It is not the role of a carbon price mechanism to engage in industry assistance related to other factors that are impacting the entire economy as opposed to the carbon price mechanism.’’

Provisos set for BlueScope Steel assistance plan

Once the threshold annual production target has been reached, steel companies BlueScope and OneSteel can spend their STP allocation on production, innovation or capital upgrades.

BlueScope must keep producing steel in Australia if it wants to get a share of the $300 million steel industry assistance package announced with the carbon tax.Climate Change Minister Greg Combet told the Mercury steelmakers BlueScope and OneSteel would need to meet a threshold of 500,000 tonnes of steel production to qualify for assistance.BlueScope's $180 million share is expected to cover its carbon tax bill for the first four years.Mr Combet said some details of the Steel Transformation Plan (STP), which was developed late in the carbon tax negotiations, were still being decided but the Government would not dictate how the money was to be spent."They'll be able to access it for several key purposes," he said."One of them is production-related, so that can certainly assist with their carbon cost."Once the production threshold has been met, there will be three criteria that trigger the funding: spending on production, innovation or capital upgrades. There is not an obligation to reduce carbon emissions.The industry will also have 94.5 per cent of its carbon costs covered via free permits."Essentially it takes the carbon price issue off the table over the next four, five years in particular,’’ Mr Combet said. ‘‘But they can access it for other things that will encourage them to upgrade their facilities.‘‘It leaves some discretion in their hands about how they want to utilise it.’’If BlueScope reduces production levels in a bid to cut costs it will not lose funding as long as production remains above 500,000 tonnes. Last year, it made almost fivemillion tonnes of steel at Port Kembla.Legislation is expected to be introduced in September for the steel plan, which was developed by the Government and industry outside the Multi-Party Climate Change Committee.Support from the Greens for the legislation is not assured, with the party saying it needs to see the proposal before it decides.Greens deputy leader Christine Milne said the party did not back the STP in the committee because steel was not the only industry struggling with the effects of the high Australian dollar.‘‘Towards the end of the negotiations, the Government indicated they wanted to create a steel package, of support for the industry, which was unrelated to the carbon price but which acknowledged the difficulties of the industry in the face of changed economic circumstances,’’ she said.‘‘The Greens’ position has always been that we would support assistance for the level of trade exposure of any industry. We were very aware of the steel industry saying that they would have difficulty meeting a carbon price.‘‘The high Australian dollar and the input costs are also impacting on agriculture, are also impacting on tourism, also impacting on the education industry.‘‘It is not the role of a carbon price mechanism to engage in industry assistance related to other factors that are impacting the entire economy as opposed to the carbon price mechanism.’’